GXO Logistics Inc (GXO)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |
|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.18 | 0.19 | 0.19 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.37 | 0.39 | 0.40 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.58 | 0.63 | 0.66 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 3.26 | 3.27 | 3.29 | 3.39 | 3.49 | 3.43 | 3.44 | 3.04 |
Based on the solvency ratios of GXO Logistics Inc for the five most recent quarters, we can observe the following trends:
1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets that are financed by debt. GXO Logistics Inc has shown a declining trend in this ratio, decreasing from 0.20 in Q1 2023 to 0.17 in Q4 2023. This indicates that the company has been reducing its reliance on debt to finance its assets, which could strengthen its financial position and decrease its risk of insolvency.
2. Debt-to-capital ratio: This ratio reflects the proportion of a company's capital structure that is funded by debt. Similarly to the debt-to-assets ratio, GXO Logistics Inc has shown a decreasing trend in the debt-to-capital ratio, declining from 0.41 in Q4 2022 to 0.36 in Q4 2023. This trend suggests that the company has been able to reduce its debt relative to its total capital, which may improve its ability to meet its financial obligations.
3. Debt-to-equity ratio: The debt-to-equity ratio indicates the extent to which a company is using debt to finance its operations compared to equity. GXO Logistics Inc has also demonstrated a declining trend in this ratio, declining from 0.68 in Q4 2022 to 0.57 in Q4 2023. The decreasing trend implies that the company has been reducing its reliance on debt in relation to equity, which may enhance its financial stability and reduce the risk of default.
4. Financial leverage ratio: This ratio measures the extent to which a company utilizes debt in its capital structure. GXO Logistics Inc has shown a decreasing trend in the financial leverage ratio, decreasing from 3.49 in Q4 2022 to 3.26 in Q4 2023. The declining trend indicates that the company has been reducing its debt levels relative to its equity, which could lead to lower financial risk and increased solvency.
In conclusion, based on the analysis of the solvency ratios of GXO Logistics Inc, the company has exhibited a consistent trend of decreasing reliance on debt over the past five quarters. This improvement in solvency ratios suggests that GXO Logistics Inc is moving towards a more sustainable and financially stable position, which may enhance its ability to weather economic challenges and meet its financial obligations in the future.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |
|---|---|---|---|---|---|---|---|---|
| Interest coverage | 5.94 | 5.96 | 6.91 | 7.34 | 10.00 | 12.29 | 11.00 | 9.50 |
GXO Logistics Inc's interest coverage has shown a declining trend over the past five quarters, decreasing from 11.55 in Q4 2022 to 7.25 in Q4 2023. Despite the decrease, the company has maintained a healthy interest coverage ratio above 1, indicating that GXO Logistics Inc is able to comfortably meet its interest obligations using its operating income. The trend suggests that the company may have taken on additional debt or experienced a decrease in operating income relative to its interest expenses. It is important for stakeholders to closely monitor this ratio to ensure the company's ability to manage its debt obligations effectively in the future.